Naval History and Heritage Command

Naval History and Heritage Command

Commander Paul Foley and L. I. Thomas to Mark L. Requa, Director of Oil Division, United States Fuel Administration, and Edward N. Hurley, Chairman, United States Shipping Board

Subject Copy.                               File No. <46-4-1>

          Cablegram Sent September <23> 24 1918   Y-6

To   Opnav, Washington             Serial No. 5372

Prep. by LIT & PF

                                  B

5372 Petroleum Mission 50 From Foley and Thomas for Hurley Requa and Shipping Control Committee. Rerouting proposals. Your telegram No. 171 our Telegrams Numbers 4<0>2 and 46.3

PARAGRAPH ONE. British Government now agree that New York export price as approved from time to time by the Oil Division of the U.S. Fuel Administration for standard white 76 ddggee <degree> <A>bel test is to be taken as the basic price for all American oil supplied and also to be basic price f.o.B.4 Sumatra Burms <Burma> or Persia for all high grade Sumatra Burma or Persian oil supplied. If oils inferior to high grade Sumatra Burma or Persia are supplied a differential in price to be established corresponding to prevailing differential in each of the Eastern countries for such inferior oils. <W>e are advised however it is not contemplated to deliver to American interestes any such inferior oils.

PARAGRAPH TWO. As regards the quoetion [i.e., question] of freight which is to be added to the basic price f.o.B. New York, British Government propose and agree to the follows:- QUOTE. Freight to be fixed by representatives of the United States and British Governments for all oil delivered by one interest to the other at the various Eastern ports it being assumed in theory that products are shipped from some one port only, such port to be agreed to by representatives of the United States and British Government. Now, assuming that New York is agreed as the theoretical single port of shipment if British interests drew oil from American interests in Japan or North China then British interests would pay to American interests f.o.b. New York basic price plus freight as agreed and fixed by representatives of the United States and British Governments from New York to Japan or North China. Or, if American interests drew oil from British interests in India South China or Egypt then American interests would pay to British interests f.o.b. New York basic price plus freight as agreed and fixed by representatives of the United States and British Governments from New York to India, South China or Egypt. Again, if Singapore is agreed as the theoretical single port of shipment then if British interests drew oil from American interests in Japan or North China, British interests would pay to American interesxx[i.e. interests] f.o.b. New York basic price plus freight as agreed and fixed by representatives of United States and British Governments from Singapore to Japan or North China. Or, conversely, if American interests drew oil from British would pay to British interests f.o.b. New York basic price plus price freight as agreed and fixed by representatives of the United States and British Governments from Singapore to India, South China or Egypt. UNQUOTE.

PARAGRAPH THREE. You will observe that all points raised in Hurley’s telegram No. 125 have been definitely agreed except question of freight contained in paragraph three. If British proposal as outlined in paragraph 2 hereof is unacceptable to United States Government then, British Government agree that a representative of the British and United States Governments should sit together and definitely settle question of freight to be added to basic price and failing an agreement between these two that they should have power to call in a third party whose decision would be final and binding as regards freight on both Governments.

PARAGRAPH FOUR. Assuming that you will accept freight settlement as proposed in paragraphs 2 or 3 hereof you should at once notify American oil interests to file Mr. M.L. Requa, Oil Director of the U.S.Fuel Administration certified figures of their deliveries into consumption by countries for the year 1913 also similar information for the year 1917 the former to determine percentages of trade and the latter to form provisional basis for future importations. The British Government are requiring British oil interests to file similar figures with Sir John Cadman, Director H.M. Petroleum Executive.6

PARAGRAPH GIVE. It is essential that we be kept closely co-ordinated with any steps taken or decisions made in the United States with respect to this matter.

PARAGRAPH SIX. This telegram has been read to and agreed to by British Government who are <is> transmitting copy to Sparks 182023 5372

Sims.  

Source Note: Cy, DNA, RG 45, Entry 517B.

Footnote 1: Document not found.

Footnote 4: F. o. B. presumably means “Free-on-board” or the crude oil price actually charged at the oil producing country’s port of loading; U.S. Energy Information Administration Glossary of Terms.

Footnote 5: For Hurley’s cable number twelve, see: Hurley to Foley and Thomas, 17 July 1918.

Footnote 6: Sir John Cadman, Baron Cadman, was a mining and petroleum engineer.

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